December 22, 2008

Multichannel Generational Behavior

Mark, age 62, has his newspaper in front of him, a paper loaded with information to help him get through the show. You can tell him that newspapers are dying, and it doesn't matter, this is how he consumes information.

Erin, age 32, has a laptop in front of her. You''ll see her Googling topics, or checking the hurdle on a free shipping offer at Macys while speaking to the audience.

As marketers, we repeatedly fail when trying to talk to these two individuals. Mark is probably not going to set up a Twitter account. His generation is the person we speak to when we mail catalogs. Erin uses search as a psuedo-administrative-assistant, in real-time.

Worse, our industry hawks the standard "Multichannel Customers Are The Best Customers" line. We encourage people to read the paper and consume information online. We homogenize the overall user experience by trying to make the look and feel of each medium appear the same --- instead of capitalizing on the unique differences between channels, we try to force people into doing things the way we want for them to do things, causing both channels to fail.

2 comments:

You've been beating the multi-channel drum a lot lately, so I thought I'd chip in with what I'm seeing at the (multi-channel) company I work for.

First, I think there's a difference between a multichannel customer and a multichannel buyer. If we say "multichannel buyers are our best buyers," I'm more inclined to agree. The fact that they'd have to have 2 or 3 (depending on definition on multi) transactions puts them above the majority of buyers. But these are just loyal customers who are not channel loyal. And they're also a small group.

What's a larger group is the multi-channel customer who has a preferred buying channel. We're finding that the majority of customers use multiple channels (mainly web and catalog for us, learned through focus groups) but will have a preferred channel for their purchases (learned through data analysis). And you'll be happy to hear that we've tested and are now identifying those customers who do not need a catalog mailed to them. We're cutting huge amounts of catalog costs and spending the money on acquisition and reactivation, some through co-ops, and are fundamentally changing our media plan. It's really quite interesting to see happening.

I think the multichannel myth is starting to be outed in our marketing department, but we're still struggling with how that translates to how to treat the different channels through merchandising and creative. The desire/need to have integrated messages still rules, and we don't yet know enough how to alter each channel's message to better address the people who are using it. Hopefully that will soon follow.

Anyway, love the contrarian views and wanted to let you know others are seeing the same thing.

One question: when we start to think about 100's or 1000's of microchannels, I start to wonder about the resources needed to manage these. What are you seeing? Given the number of people dedicated to mailing catalogs or dealing with affiliates or search engines, what will it take to manage all the new microchannels appearing now?

Good job on the re-allocation of catalog expense to online marketing ... if the data suggest that is a good idea, then by all means, take advantage!

I believe there will be a transition that happens over time. As we wind catalog marketing down to a soft landing over the next decade, we'll allocate staff from catalog marketing (and this means contact center staff too) to manage micro-channels.

In other words, it might mean that we need ten people to effectively manage micro-channels. We'll gradually shift headcount away from catalog marketing and contact centers to micro-channels. There's nothing wrong with cherry-picking the best contact center staff, and use them to monitor topics on Twitter, and have them interact on Twitter, as an example.

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Kevin Hillstrom, President, MineThatData

Kevin is President of MineThatData, a consultancy that helps CEOs understand the complex relationship between Customers, Advertising, Products, Brands, and Channels. Kevin supports a diverse set of clients, including internet startups, thirty million dollar catalog merchants, international brands, and billion dollar multichannel retailers. Kevin is frequently quoted in the mainstream media, including the New York Times, Boston Globe, and Forbes Magazine.

Prior to founding MineThatData, Kevin held various roles at leading multichannel brands, including Vice President of Database Marketing at Nordstrom, Director of Circulation at Eddie Bauer, and Manager of Analytical Services at Lands' End.

You may contact kevin at kevinh@minethatdata.com.

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